1. The Poverty Reduction Strategy Process in the CIS-7
Emerging Experience and Future Prospects
February 21, 2002
D. Gressani, World Bank

2. Brief History of the PRSP Process
New approach to the challenge of poverty in low-income countries, introduced in December 1999, motivated by the realization that:
Progress in poverty reduction has been slow, and aid has not been effective in reducing poverty;
Conditionality imposed from outside cannot substitute for domestic commitment to reform;
Domestic commitment to reform need to be grounded in broad-based debate on policy alternatives; and
Poverty reduction objectives need to be placed at the core of policy making and aid coordination.

3. Core Principles of the PRSP Approach
The approach is based on country-owned strategy that serves as framework for development assistance.
Underlying principles are:
Country-driven
Result-oriented
Prioritized
Comprehensive
Based on domestic and external partnerships, and
Long-term focused

4. Trends in Poverty in Europe and Central Asia
Poverty and inequality increased dramatically during the last decade.
The transition process has been accompanied by a rise in economic insecurity, as a result of uncertain employment and unpredictable social benefits.
Past achievement in health and education are being undermined by cutbacks in basic services and widespread under-the-counter payments.
The decline in the participation of the poor in informal networks, and the increase in social tensions resulting from rising inequality have led to a decline in social cohesion.

5. Emerging Lessons of Experience
While there are important differences in experience of the CIS countries with the PRSP process, there are some positive common results:
1. Improved communication within government, especially between core and sectoral agencies;
2. Improved communication between government and civil society organizations;

6. Emerging Lessons of Experience cont’d
Stronger emphasis on understanding the causes of poverty as a foundation for choosing policies with the greatest impact on poverty;
Strong consensus that good governance and transparency are key to implementation and monitoring of poverty reduction strategy; and
Improved coordination among donors, and greater alignment of aid to country-driven priorities.

7. Consolidating These Early Results
Experience from other countries on these five issues indicates that the following actions are important:
Sharing information on the PRSP process, on poverty diagnostics, and on the budget for key programs;
Establishing mechanisms for feedback to local participants in the PRSP process and for reporting to key stakeholders;

8. Consolidating These Early Results (cont’d)
Developing local capacity and institutions for policy monitoring and analysis, both in government and civil society;
Building consensus around key measures to improve governance and fight corruption; and
Involving donors in the PRSP process early and systematically.

9. Challenges Ahead
Three challenges are especially critical for impact on the lives of the poor in the CIS countries:
Putting poverty reduction at the center of policy making;
Prioritizing policy actions to have the greatest impact on poverty; and
Improving capacity to implement the strategy.